Deloitte Ireland examined the solvency and financial condition reports—which must be made publically every year under Pillar III of Solvency II—of Irish life, non-life, health and composite companies and, within this, direct writers, reinsurers and captives of all sizes.
The Central Bank of Ireland “sent a clear message” to Irish insurers and reinsurers that the system of governance was a key disclosure requirement, but, in Deloitte’s opinion, “companies struggled to present useful information in an accessible way”.
“In many cases, this section was a compilation of information already included in other documents without much attention to the overall coherence and consistency of the information presented,” Deloitte said.
“Generally, the information presented was at the minimum factual level with no real insight into the company-specific system of governance. Some companies did include diagrams to provide clarity around the company and its governance structure but this approach was not universal. The overall feel of this section was that it was very ‘boilerplate’.”
A number of specific requirements to be included within the system of governance section of the solvency and financial condition report were not always met, according to Deloitte.
“For example, a number of companies did not include the location of outsourced providers within their report and only a small minority of companies gave more information on their remuneration policy than just the general principles.”
Deloitte anticipates the system of governance to be an area where companies will need to enhance as market practice emerges.